Julia Gorham and Anita Lam, DLA Piper (Hong Kong)
Following the changes made to the Labour Tribunal Ordinance in December 2014, the Labour Tribunal now has power to order either the employer or the employee to provide security for payment of an award.
However, can the Tribunal order a claimant to provide security payment? The short answer is yes!
Power to Order Security
Typically, an order for payment of security can be made in the following circumstances:
- There is a real risk that the payment of an award or order will be obstructed or delayed;
- The party has conducted the proceedings in a manner that delays the determination of the case or the party’s conduct otherwise constitutes an abuse of the process; or
- The party has, without reasonable excuse, failed to comply with any award, order or direction.
Lam Che Fu v The Chinese Kitchen (Sai Kung) Ltd (“The Chinese Kitchen” case)
The Chinese Kitchen case is concerned with an employee (a claimant) who tried to claim overtime pay from his employer. However, in the course of pursing his claim, he was ordered by the Labour Tribunal to pay a sum of HK$14,452 into the Tribunal as security for payment of an award. This order was made on the basis that the employee’s conduct in the Labour Tribunal proceedings was an abuse of the process.
Being dissatisfied with the Tribunal’s order, the employee sought permission from the High Court to appeal. However, he did not find favour with the High Court, and the High Court Judge found no merit in changing the Tribunal’s order. In affirming the order for the employee to make security payment, the High Court judge took the following facts into account:
- The employee’s inability to produce any supporting documents to substantiate his claim for overtime pay;
- The employee never demanded any overtime pay prior to his cessation of employment; and
- There were various inconsistencies in the matters he told the Tribunal as “facts” in support of his case. His case was simply not credible.
In this case, the Tribunal could have ordered the employee to provide security on the basis that payment of the award for the employer’s counterclaim might be delayed. However, it did not do so. Instead, the Tribunal ordered the employee to give security on the basis that he abused the Tribunal’s process.
Beware: If a claimant abuses the Tribunal’s process, the Tribunal can be quite ready to order the claimant to pay security money too!